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EUR has been on a steady downtrend since the ECB met on May 8th, 2014. This could continue vs. a handful of currencies however, $EURJPY could be looking at technical support. The 2014 Closing Low 136.50 has seen many bounces and due to a few levels of Support such as the Monthly S1, 61.8% Fibo Retracement, buyers could begin to emerge. ﻿

Are you familiar with the technical term of confluence? It's when completely different technical tools like moving averages, Fibonacci Levels, or pivots lay right on top of each other. This signifies a critical level could be sitting at a specific price area.

There is a strong confluence on $AUDUSD near 0.9200. The chart below shows that these levels combine; prior price action support, the 200-dma, and 2 critical Fibonacci relationships. If the USD continues to strengthen and AUDUSD continues to drop, the 0.9200 level will be a critical level to watch to see if buyers step in or the correction deepens.

This morning, EURUSD punched below the infamous 1.3503 spike low of early June and printed an intraday low just 13 pips above the 2014 low. However, we're about to close on the highs, which is an ominous price action signal.

If you're in this trade or aren't sure about entering, here are a few levels worth watching.

A close above 1.3575 could warn of a bounce higher is in the works and it's best to put aside a short bias for now. However, a close back below the 2014 low of 1.3476 could bring the Nov. '13 low of 1.3295 into focus.

I've yet to find something that can help you see where the next probable move in the market could land like the Elliott Wave Approach. Looking to the USDOLLAR index provided by FXCM / Dow Jones, Keep an eye for the following levels:

Believe or not, the bears have turned to bulls. At least according to the DailyFX Speculative Sentiment Index. If you're not familiar with the SSI, it is a prime contrarian indicator in the FX market.

Here is the description from the DailyFX site:

The SSI is a powerful tool unique to FXCM. It shows you FXCM's trading book: what our clients are trading. At a glance, you can see where traders are in the market. Are there large numbers of buyers or sellers? Are they exiting or entering? FXCM's SSI is updated twice every day, and the information is current - unlike the COT report.

As a contrarian indicator, when a majority of traders are short, you can look for buying entries. Since July 2013, this has been the case, whereas EURUSD contained many sellers and few buyers. Unfortunately for them, this was happening as EURUSD was moving from 1.2750 up to 1.3992 in early May '14.

However, a major shift has developed. Specifically, EURUSD SSI readings have flipped from net-negative since 07/13-05/14 to net positive toward the end of this month. Should the Bulls gather steam, a clear contrarian signal would be put in to have us looking for further declines.

The data out of the US is finally starting to impress. This is a story that Wall-Street and FX traders around the world have been waiting for. Based on a recent turn-around in $USDCAD, the best as well as the 2014 highs, could be yet to come. ﻿

The USDollar continues to underwhelm in 2014 and if Risk-On sentiment continues (it's starting to feel like SPX500 will never drop 10% +) AUDUSD could find itself pushing higher yet again.

A few key technical levels come into picture. 0.9450 is the corrective high that a trendline is drawn off of and a close above that level could see the correction as over. A more aggressive entry would be to enter off the trendline break, which sits near 0.9405.

EURUSD Could be facing huge resistance around 1.3671-90 due to the prior price action high and the Daily Ichimoku Cloud. A break of the first major support near 1.3576 could favor a re-test of the 2014 low of 1.3476

An important election took place which gave victory to the Liberal party in Ontario, which will look to boost the economy through a massive spending for infrastructure and education all the while the nations budget is in the red.

Keep an eye on the 1.0820 level on USDCAD because if it holds, there could be opportunity on the horizon for USDCAD longs. If that level breaks due to USD weakness, then GBPCAD could become increasingly attractive. ﻿

We will never know until we know but there is evidence that could favor that a top may have been put in for EURUSD this month.

First, the long-term charts show a very ominous pattern for EUR bulls. A Bearish Key Month is at work. A Bearish Key Month, or week or day, happens when you post a higher high but close BELOW the low of the prior time period. This shows a key reversal of sentiment and a close today below 1.3671 would confirm a bearish key month, which developed off a 5-year trend line. ﻿

Yes, tops are equidistant, and tome zones are near aligned. (I don't normally do much TA on this time frame but thanks for jogging my look left beyond the daily chart.) price action poking above SB (ICH) this month also adds to the compass pointing south and the next plateau is lower is adds the heap. But price is king and as I say play it day by day. Thanks for the post.﻿

Tyler Yell is a Trading Instructor for DailyFX. Tyler began trading equities in his own account after graduating from Texas State University in 2005 to work as a Financial Advisor to business owners and wealthy individuals. Tyler came to FXCM from JPMorgan Chase where he began trading Forex back in 2007. Tyler has a unique ability to communicate market truths like risk management and technical set ups in a simple way to improve comprehension and application for the newer trader. His technically focused strategy looks at mainly price action across multiple time frames to catch those big moves that develop throughout the year. He believes there is always a move worth trading and he will help you find it while teaching you how to find those moves yourself.

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